This report is submitted pursuant to 1705(e)(6) of the Cuban Democracy
Act of 1992, 22 U.S.C. 6004(e)(6) (the "CDA"), as amended by section
102(g) of the Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of
1996, Public Law 104-114 (March 12, 1996), 110 Stat. 785, 22 U.S.C.
6021-91 (the "LIBERTAD Act"), which requires that I report to the
Congress on a semiannual basis detailing payments made to Cuba by any
United States person as a result of the provision of telecommunications
services authorized by this subsection.

The CDA, which provides that telecommunications services are permitted
between the United States and Cuba, specifically authorizes the
President to provide for payments to Cuba by license. The CDA states
that licenses may be issued for full or partial settlement of
telecommunications services with Cuba, but may not require any
withdrawal from a blocked account. Following enactment of the CDA on
October 23, 1992, a number of U.S. telecommunications companies
successfully negotiated agreements to provide telecommunications
services between the United States and Cuba consistent with policy
guidelines developed by the Department of State and the Federal
Communications Commission.

Subsequent to enactment of the CDA, the Department of the Treasury's
Office of Foreign Assets Control (OFAC) amended the Cuban Assets
Control Regulations, 31 C.F.R. Part 515 (the "CACR"), to provide for
specific licensing on a case-by-case basis for certain transactions
incident to the receipt or transmission of telecommunications between
the United States and Cuba, 31 C.F.R. 515.542(c), including settlement
of charges under traffic agreements.

The OFAC has issued eight licenses authorizing transactions incident
to the receipt or transmission of telecommunications between the United
States and Cuba since the enactment of the CDA. None of these licenses
permits payments to the Government of Cuba from a blocked account. For
the period January 1 through June 30, 1997, OFAC-licensed U.S. carriers
reported payments to the Government of Cuba in settlement of charges
under telecommunications traffic agreements as follows: